Standard deviation is a number that indicates how much on average each of the values in the distribution deviates from the mean (or center) of the distribution.

Bollinger Bands, created by John Bollinger in the 1960s, is an indicator that uses this statistical measure to determine support and resistance levels. This indicator consists of three lines and is very simple to derive; the middle line is a simple moving average of the underlying price data and the two outside bands are equal to the moving average plus or minus one standard deviation.